Bulletin: CIMIC's Ichthys Project Settlement Erodes Credit Metric Headroom

This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) April 14, 2022--CIMIC Group Ltd.'s settlement of liabilities associated with the Ichthys liquefied natural gas project in Australia will likely result in higher leverage for the next 12 months compared to our expectations for the company?s stand-alone credit profile (SACP). This latest settlement continues recent efforts by CIMIC (BBB-/Stable/A-3) to clean up its material contingent exposures. It follows a settlement in December 2021 in relation to the West Gate Tunnel dispute and material provisions made following the Australia-based engineering and construction company's January 2020 exit from the Middle East. While CIMIC's recent settlements address the risks related to several large potential exposures that have weighed on its balance

...MELBOURNE (S&P Global Ratings) April 14, 2022--CIMIC Group Ltd.'s settlement of liabilities associated with the Ichthys liquefied natural gas project in Australia will likely result in higher leverage for the next 12 months compared to our expectations for the company's stand-alone credit profile (SACP). This latest settlement continues recent efforts by CIMIC (###-/Stable/A-3) to clean up its material contingent exposures. It follows a settlement in December 2021 in relation to the West Gate Tunnel dispute and material provisions made following the Australia-based engineering and construction company's January 2020 exit from the Middle East. While CIMIC's recent settlements address the risks related to several large potential exposures that have weighed on its balance sheet, they have led to near-term pressure on credit metrics. Following the A$492.5 million Ichthys settlement (A$192.5 million to be paid this month and A$300 million to be paid in March 2023), we forecast an underlying...

Bulletin